Canada's financial profile continues to strengthen. Impressive debt reduction and successful inflation targeting give Canada fiscal and monetary flexibility to cope with downturns in the business cycle. A strong public sector balance sheet, and policy stability based upon wide political consensus, augur well for Canada's long-term growth prospects. Budget surpluses and continued economic growth have reduced the federal government's debt burden, placing Canada in a better position to meet the fiscal challenges of an aging population than many other Organization for Economic Co-operation and Development (OECD) countries. Gross federal government debt (including all market debt, accrued pension, and other liabilities) is projected to decline to 54% of GDP at fiscal year-end 2005 (ending March 31, 2005) from 77% a decade
